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Image by AFP/Getty Images via @daylife

Microsoft launched the Mango update for its Windows Phone devices in late 2011. Apparently, it is planning to launch a new version of Windows Phone called “Tango”, which will target primarily lower-end, budget devices. [1]

Windows Phone Tango will come with a series of new features and will be optimized for lower RAM devices.

By targeting Windows Phone at the low-end smartphone market which is currently dominated primarily by Google's Android, Microsoft aims to increase its market share. It will continue to compete with Apple‘s iPhone as well as high-end Android devices too, with the rumored Windows Phone Apollo.

Despite launching a multitude of devices with its hardware partners and spending heavily on marketing them, Microsoft hasn’t made significant strides in the smartphone market.

By dropping the minimum hardware requirements for Windows Phones running Tango, Microsoft plans to bring down the average price of Windows Phones and capture more market share by competing with Android and Symbian, the two biggest players in the budget smartphone market. However, it could also lead to hardware fragmentation and lead to issues with application compatibility in Windows Phone devices running different versions of the OS.

We should see an official announcement for Windows Phone Tango soon, possibly at MWC 2012.